Five Top Supply-Chain Strategies to Implement in 2023

By Team Ikigai

What's in this article:

  • Introduction
  • Increased use of machine learning and artificial intelligence (AI/ML) in supply chain solutions
  • Advanced Supply Chain Analytics
  • Adopting IoT and digital supply chain solutions
  • Focus on Supply Chain Agility & Resilience
  • The customer will be at the center of Supply Chain decisions.
  • Conclusion

Five top supply-chain strategies to implement in 2023

The supply chain has become a crucial aspect of any business, as it directly impacts the efficiency, cost, and customer satisfaction of a company's operations. In today's rapidly changing business landscape, it is more important than ever for businesses to stay ahead of the curve and implement effective supply chain strategies to stay competitive. This blog will discuss the five top supply chain strategies businesses should consider implementing in 2023. By implementing these strategies, businesses can improve their supply chain operations, adapt to changing market demands, and position themselves for success in the new year.

In the new norm post-COVID-19 disruptions, uncertainty adaption has become crucial to supply chain managers' profiles. It implies that they should examine the changing markets and customer needs, assess the risk and rewards, and develop solutions to increase customer satisfaction while reducing costs.

Based on the dynamic ecosystem and scenarios of the preceding years, the five supply chain trends to expect in 2023 are as follows.

1. Increased use of machine learning and artificial intelligence (AI/ML) in supply chain solutions

The spread of artificial intelligence (AI) and machine learning (ML) across industries has been facilitated by technological development. In 2021, the global market for artificial intelligence in supply chains was assessed at USD 5,610.8 million, according to a report by Blueweave Consulting. This number is projected to reach USD 20,196.6 million by 2028, with an annual compounded growth rate (CAGR) of 20.5% YoY. In 2023, using AI in demand forecasting, S&OP, IBP and market assessment will be one of the most prominent developments in supply chains.

AI can deliver enormous benefits to supply chains. The top 5 of these benefits are:

  1. Increased efficiency: AI can analyze vast amounts of data and perform tasks faster and more accurately than humans, leading to increased efficiency and productivity in the supply chain.
  2. Improved forecasting and demand predictions: AI can analyze historical data and current market trends to make more accurate forecasts and demand predictions. This can help businesses better allocate resources and minimize excess inventory.
  3. Enhanced customer satisfaction: AI can help businesses personalize and optimize the customer experience, improving customer satisfaction and loyalty.
  4. Reduced costs: AI can automate and streamline various processes in the supply chain, leading to reduced labor and operational costs.
  5. Improved decision-making: AI can provide businesses with real-time insights and recommendations based on data analysis, enabling more informed and strategic decision-making in the supply chain.

2. Advanced Supply Chain Analytics

Data is essential for firms to make strategic supply chain management decisions. But a majority of businesses still use spreadsheets to track critical data. This method is no longer suitable or relevant for managing complex supply chains and a mound of data. Most sectors actively pursue digital supply chains through intelligent automation with lesser human involvement in management while attaining superior results.

Advanced analytics is seen by 74% of supply chain executives as the second most important supply chain technology. Using powerful analytics, supply chain managers can view their whole supply chain, including its strengths, flaws, and pain points.

You can use the actionable insights provided by advanced analytics to:

  1. Improve forecasting and demand prediction: Advanced data analytics can help businesses analyze historical data and current market trends to make more accurate forecasts and demand predictions, which can help optimize inventory levels and allocate resources more effectively.
  2. Optimize supply chain operations: Data analytics can provide insights into various processes and operations in the supply chain, allowing businesses to identify bottlenecks and inefficiencies and implement strategies to streamline and optimize these processes.
  3. Improve customer experience: Data analytics can help businesses understand customer needs and preferences, allowing them to personalize and optimize the customer experience, leading to increased satisfaction and loyalty.
  4. Identify new business opportunities: Data analytics can provide insights into market trends and customer behavior, helping businesses identify new growth opportunities and develop strategies to capture them.
  5. Improve risk management: Data analytics can help businesses identify and mitigate potential risks in the supply chain, such as disruptions or delays, and develop contingency plans to minimize the impact of these risks.

3. Adopting IoT and digital supply chain solutions

The internet of things, or IoT, is a network of computing devices, mechanical and digital machinery, items, animals, and people with interconnected identifiers (UIDs). IoT enables data flow over a network without requiring human-to-human or human-to-computer interaction. According to the experts at International Data Corporation (IDC), there will be 55.7 billion linked devices on the market by 2025 due to the widespread adoption of IoT.

IoT in the supply chain can provide numerous benefits, including increased efficiency, improved accuracy, and reduced costs. For example, IoT devices such as sensors and RFID tags can track the movement and condition of goods throughout the supply chain in real-time. This information can then be used to optimize inventory management, reduce the risk of loss or damage to goods, and improve the accuracy of delivery predictions. Additionally, IoT can be used to monitor and optimize the performance of equipment and machinery in the supply chain, allowing for identifying and resolving potential issues before they become major problems. Integrating IoT into the supply chain can greatly improve the supply chain process's efficiency, accuracy, and responsiveness, leading to increased customer satisfaction and cost savings for businesses.

IoT is advantageous to organizations in numerous ways:

  1. Improved accuracy and real-time tracking: IoT can provide real-time tracking of goods and equipment throughout the supply chain, allowing businesses to understand their current location and condition better. This can improve the accuracy of delivery predictions and reduce the risk of loss or damage to goods.
  2. Increased efficiency and automation: IoT can automate various processes in the supply chain, such as tracking and inventory management, freeing up resources and increasing efficiency.
  3. Cost savings: The integration of IoT into the supply chain can lead to reduced labor costs and decreased inventory and operational costs due to improved accuracy and efficiency.
  4. Improved risk management: IoT can provide businesses with real-time information about potential disruptions or issues in the supply chain, allowing them to address and mitigate these risks proactively.

In addition, connecting IoT with important business tools, such as business intelligence software or ERPs, will allow supply chain managers to make data-driven supply chain choices.

4. Focus on Supply Chain Agility & Resilience

In the rapidly changing business landscape, supply chain agility and resilience have become increasingly important for businesses to stay competitive and adapt to changing market demands. Supply chain agility refers to a company's ability to quickly and efficiently respond to changes in demand. In contrast, supply chain resilience refers to a company's ability to withstand and recover from disruptions or challenges. In 2023, there is likely to be an increased focus on both factors as businesses navigate an uncertain economic environment and prepare for potential disruptions.

To increase supply chain agility and resilience, businesses may consider implementing strategies such as diversifying their supplier base, optimizing their inventory management, and building strong relationships with key partners. They may also consider adopting technologies such as automation and IoT to improve the efficiency and responsiveness of their operations. Additionally, businesses may improve their forecasting and demand prediction capabilities, as this can help them respond more effectively to changes in the market.

Overall, a focus on supply chain agility and resilience can help businesses better adapt to changing market conditions and minimize the impact of disruptions on their operations. By implementing strategies and technologies that enhance these factors, businesses can position themselves for success in the unpredictable business environment of 2023.

5. The customer will be at the center of Supply Chain decisions.

In today's increasingly competitive and dynamic business environment, businesses must prioritize the customer experience in their supply chain operations. This is known as customer-centricity, which refers to the focus on enhancing the customer journey from the point of ordering to the delivery of goods. According to research firm Gartner, a significant majority of businesses (83%) view the enhancement of the customer experience as a key component of their digital business strategy. With customers becoming increasingly demanding and it easy to switch to other brands, companies need to offer exceptional customer service and personalized product recommendations to stand out in the market. In short, customer-centricity is likely a key focus in 2023 for supply chain managers.

In conclusion, the supply chain is a crucial aspect of any business, as it directly impacts efficiency, cost, and customer satisfaction. In the rapidly changing business landscape of 2023, it is more important than ever for businesses to stay ahead of the curve and implement effective supply chain strategies to stay competitive. The five top supply chain strategies that businesses should consider implementing in 2023 include increased use of machine learning and artificial intelligence, advanced supply chain analytics, customer centricity, supply chain digitization, IoT and automations, and increased focus on supply chain agility and resilience. By implementing these strategies, businesses can improve their supply chain operations, adapt to changing market demands, and position themselves for success in the upcoming year. Using Ikigai, you can integrate vast volumes of data into your planning and forecasting process, systematically incorporating external data sources to produce precise predictions about future demand.

Ikigai is an operational BI platform that uses augmented actions to navigate toward company objectives. As the only commercially available product based on cutting-edge MIT research on AI and machine learning, Ikigai helps supply chain teams improve the speed and accuracy of their decisions in the VUCA world, thereby increasing the return on investment (ROI) of the business.

Ikigai combines data analytics, visualizations, and automation with its proprietary technologies, such as aiMatch and aiCasting time series forecasting, and translates them into more precise decision-making data. Let's connect for a quick chat.